Bill Text: HI SB829 | 2010 | Regular Session | Introduced

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Bill Title: Hawaii Public Procurement Code; Preferences

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [SB829 Detail]

Download: Hawaii-2010-SB829-Introduced.html

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Report Title:

Hawaii Public Procurement Code; Preferences

 

Description:

To expand and modify the Hawaii products preferences to create a class IV preference for agricultural products raised, grown, or harvested in the State.

 

THE SENATE	S.B. NO.	829
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO HAWAII PUBLIC PROCUREMENT CODE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  At one time, Hawaii was entirely self-sufficent in meeting its population's food needs.  Now, approximately ninety per cent of our food is imported from the United States mainland and foreign sources.  As an island state, we are extremely vulnerable to any disruption in supply.  Further, this dependence on sources of supply outside of Hawaii means that we are spending approximately $3,100,000,000 annually to support agribusinesses in other states and countries.  If just ten per cent of this payment to outside sources could be replaced by purchases of locally raised, grown, or harvested products, the economy-wide impact would be $188,000,000 in sales, $47,000,000 in earnings, $6,000,000 in state tax revenues, and more than 2,300 jobs.  While we can never expect to return to the days of complete self-sufficiency, we can make a commitment to increasing consumption of Hawaii products and thereby benefit our economy, increase our food independence, reduce the influx of invasive species, and improve residents' nutrition.

     There is a growing awareness among Hawaii consumers that supporting local agriculture makes sense and is "the right thing to do."  Not only does purchasing local products support our own farmers, it also reduces the carbon footprint created by the imported goods.  At the 2008 Hawaii farm fair, over eighty per cent of attendees stated that they prefer to "buy local."

     This measure complements the Hawaii department of agriculture's buy fresh, buy local campaign to encourage Hawaii consumers to buy local agricultural products whenever possible by encouraging the same by governmental agencies, including those purchasing for state-supported institutions.  The current procurement preferences do not provide enough of an incentive for Hawaii farmers to be competitive in selling to the State.  If new local markets are accessible to Hawaii farmers, in the long term they will become more efficient and thus more price competitive.  Enhanced efficiency will lead to more production and ultimately, greater consumption of local products by institutions and the general public and lowered dependency on imports.

     SECTION 2.  Section 103D-1001, Hawaii Revised Statutes, is amended by amending the definition of "Hawaii products" to read as follows:

     ""Hawaii products" means products that are mined, excavated, produced, manufactured, raised, [or] grown, or harvested in the State where the input constitutes no less than twenty-five per cent of the manufactured cost; provided that:

     (1)  Where the value of the input constitutes twenty-five per cent or more, but less than fifty per cent, of the manufactured cost, the product shall be classified as class I;

     (2)  Where the value of the input constitutes fifty per cent or more, but less than seventy-five per cent, of the manufactured cost, the product shall be classified as class II; [and]

     (3)  Where the value of the input constitutes seventy-five per cent or more of the manufactured cost, the product shall be classified as class III[.]; and

     (4)  Where the product is a fruit, nut, or vegetable that is raised, grown, or harvested in the State, or where any aquacultural, horticultural, silvicultural, floricultural, or livestock product is raised, grown, or harvested in the State, the product shall be classified as class IV."

     SECTION 3.  Section 103D-1002, Hawaii Revised Statutes, is amended to read as follows:

     "§103D-1002  Hawaii products.  (a)  A purchasing agency shall review all specifications in a bid or proposal for purchase from the Hawaii products list where these products are available; provided that the products:

     (1)  Meet the minimum specifications and the selling price f.o.b. jobsite;

     (2)  Unloaded including applicable general excise tax and use tax does not exceed the lowest delivered price in Hawaii f.o.b. jobsite; and

     (3)  Unloaded, including applicable general excise tax and use tax, does not exceed the lowest delivered price of a similar non-Hawaii product by more than:

         (A)  Three per cent where class I Hawaii products are involved;

         (B)  Five per cent where class II Hawaii products are involved; [or]

         (C)  Ten per cent where class III Hawaii products are involved[.]; or

         (D)  Fifteen per cent where class IV Hawaii products are involved.

     (b)  All invitations for bids and requests for proposals shall include a description of the products that are listed in the Hawaii products list established pursuant to this section, and their established classes, which may be used to complete the scope of work specified in the invitation for bids or request for proposals, where the products are available and meet the minimum specifications.

     (c)  If the purchasing agency purchases products raised, grown, or harvested outside the State that are similar to class IV Hawaii products, the officer responsible for the purchase shall certify in writing the reasons that similar products of equal quality raised, grown, or harvested in the State were not purchased.

     [(c)] (d)  All persons submitting bids or proposals to claim a Hawaii products preference shall designate in their bids which individual product and its price is to be supplied as a Hawaii product.

     [(d)] (e)  Where a bid or proposal contains both Hawaii and non-Hawaii products, then for the purpose of selecting the lowest bid or purchase price only, the price bid or offered for a Hawaii product item shall be decreased by subtracting therefrom:  three per cent, five per cent,[or] ten per cent, or fifteen per cent for the class I, class II, [or] class III, or class IV Hawaii product items bid or offered, respectively.  The lowest total bid or proposal, taking the preference into consideration, shall be awarded the contract unless the bid or offer provides for additional award criteria.  The contract amount of any contract awarded, however, shall be the amount of the bid or price offered, exclusive of the preferences.

     [(e)] (f)  Upon receipt and approval of application for Hawaii products preference, the administrator shall include within the Hawaii products list, the names of producers and manufacturers in the State who are authorized to supply locally manufactured soil enhancement products to state agencies under subsection [(h)](i).  The administrator of the state procurement office shall maintain and distribute copies of the list to the purchasing agencies of the various governmental agencies.

     [(f)] (g)  This section shall not apply whenever its application will disqualify any governmental agency from receiving federal funds or aid.

     [(g)] (h)  Any purchase made or any contract awarded or executed in violation of this section shall be void and no payment shall be made by any purchasing agency on account of the purchase or contract.

     [(h)] (i)  For the purposes of this section, "soil enhancement product" means any nonchemical soil preparation, conditioner, or compost mixture designed to supplement aeration or add organic, green waste, or decaying matter to the soil; provided that the term does not include any plant fertilizer intended to stimulate or induce plant growth through chemical means.  All state agencies shall include in their solicitations, when required, the soil enhancement products identified on the Hawaii products list pursuant to subsection [(e)](f)."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:	_____________________________
	By Request